China: Farmers use land rights to access loans
Beijing has long called for more modern, larger farms but farmers struggle to get loans to expand as they have no assets to use as collateral.
All land in China is owned by the state.
The aim is to boost financial support for farmers, said China’s cabinet.
China’s farm sector employs almost a third of its 1.4 billion people but its share of GDP has declined over the years; productivity on China’s tiny farms is low.
Heilongjiang province, China’s breadbasket in the north-east, and eastern Shandong province are experimenting with the use of land rights as collateral.
Under the new project, land use rights and property could be pledged to secure bank loans, said a cabinet document, which stated farmers’ interests would be strictly enforced.
“We will steadily conduct the pilot programme on the use of the two rights (land and property) as collateral, on condition that risks will be controlled and on the basis of relevant laws and policies on rural and reforms,” said the council.
